CAGR Calculator

Investment Details

Beginning Value

Ending Value

Number of Years

Compound Annual Growth Rate

Total Growth

Total Gain

CAGR Formula

Standard CAGR Formula

CAGR = (Ending Value ÷ Beginning Value)^(1 ÷ Years) − 1

Multiply the result by 100 to express it as a percentage.

Worked Example

Investment grows from ₹1,00,000 to ₹2,50,000 over 5 years

CAGR = (2,50,000 ÷ 1,00,000)^(1÷5) − 1
CAGR = (2.5)^0.2 − 1
CAGR = 1.2011 − 1 = 0.2011 = 20.11%

Reversing CAGR to Project Future Value

Future Value = Beginning Value × (1 + CAGR)^Years

Example: ₹1,00,000 growing at 20.11% CAGR for 5 years
= 1,00,000 × (1.2011)^5 ≈ ₹2,50,000

Common Growth Scenarios

₹1L → ₹2.5L over 5 years

CAGR ≈ 20.11%

₹5L → ₹9L over 7 years

CAGR ≈ 8.75%

₹10L → ₹8L over 3 years (loss)

CAGR ≈ -7.17%

₹50K → ₹10L over 15 years

CAGR ≈ 21.72%

Frequently Asked Questions

CAGR (Compound Annual Growth Rate) is the average annual growth rate of an investment over a period of time, assuming profits are reinvested each year. It smooths out year-to-year volatility into a single, easy-to-compare percentage, making it the standard way to compare the performance of mutual funds, stocks, and business revenue over different time periods.

A simple average return adds up each year's percentage return and divides by the number of years, which can be misleading when returns are volatile (a 50% loss followed by a 50% gain looks like a 0% average, but the investment actually lost 25% of its value). CAGR accounts for compounding and reflects the smoothed growth rate that actually gets you from the starting value to the ending value.

Yes. If the ending value is lower than the beginning value, CAGR will be negative, representing the average annual rate at which the investment declined in value over the period.

No. Standard CAGR only compares a single beginning value to a single ending value over a fixed period - it does not account for additional contributions or withdrawals made along the way. For investments with periodic contributions, like a SIP, XIRR is a more accurate measure of return.

It depends on the asset class and time period. For long-term equity investments, a CAGR of 10-15% annually is often considered strong, while for less volatile assets like bonds or fixed deposits, a CAGR of 5-8% is typical. Always compare CAGR against a relevant benchmark or index over the same time period.

CAGR Calculator - Find the True Annualized Return on Any Investment

CAGR (Compound Annual Growth Rate) answers a simple but important question: if an investment's growth had been perfectly smooth every year instead of jumping around, what single annual rate would explain the change from its starting value to its ending value? This makes CAGR the standard metric for comparing the performance of mutual funds, stocks, real estate, or business revenue across different time periods and different investments.

Quick reference: CAGR = (Ending Value ÷ Beginning Value)^(1 ÷ Years) − 1, expressed as a percentage.

Why CAGR Is More Reliable Than a Simple Average Return

A simple average return can be dangerously misleading with volatile investments. Consider an investment that loses 50% in year one and then gains 50% in year two - the simple average return looks like 0%, suggesting no change. In reality, ₹100 falling to ₹50 and then rising 50% only reaches ₹75, a net loss of 25%. CAGR correctly captures this by accounting for the compounding effect, showing the investment actually declined at an annualized rate of roughly 13.4% over the two years.

CAGR vs. XIRR: When to Use Which

CAGR works well when you have a single lump-sum investment made at one point in time and one ending value at a later point. However, if you've made multiple contributions over time - like a monthly SIP or periodic top-ups to a portfolio - CAGR cannot account for the timing and size of each contribution. In that case, XIRR (Extended Internal Rate of Return) gives a more accurate picture of your actual annualized return.

Using CAGR to Compare Investments

Because CAGR expresses growth as a clean annual percentage, it's the easiest way to compare very different investments on equal footing - for example, comparing a stock held for 3 years against a mutual fund held for 7 years, or comparing your portfolio's growth against a benchmark index over the same period. Always make sure you're comparing CAGR over identical time frames, since growth rates can vary significantly depending on the start and end dates chosen.

Limitations to Keep in Mind

CAGR smooths out volatility: Two investments with the same CAGR can have very different risk profiles - one might have grown steadily while the other swung wildly before arriving at a similar ending value.
It ignores intermediate cash flows: Dividends, contributions, or withdrawals made during the period are not factored into a basic CAGR calculation.
Past CAGR doesn't guarantee future performance: A high historical CAGR reflects what already happened, not a forecast of what will happen next.

A Practical Way to Use This Calculator

Enter the value of your investment at the start and end of any period, along with the number of years in between, to see its CAGR instantly. You can also work the formula in reverse - the Formula tab shows how to project a future value if you assume a certain CAGR continues, which is useful for setting realistic long-term growth expectations for goals like retirement or a child's education fund.

How this calculator works, and where the numbers come from

The CAGR Calculator applies the standard formula for this calculation to the values you enter and updates the result as you type. The calculation itself happens in your browser, and the page explains the method so you can check any result by hand.

Please note: Projections assume the inputs you enter stay constant; real returns vary. Results are estimates, not financial advice.

Sources and further reading

Learn more

Read our guide: Compound Interest and the Rule of 72, Checked Against the Math

Last reviewed: October 6, 2026 by the CalcQube Editorial Team. See our editorial policy for how we build and check calculators, or report an error.